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Pre-Retirement Workshop: Overview. L.A. County Employees and Retirees Financial Components of Retirement Cost of Living Adjustment Social Security Integration Retirement Eligibility Computing Your Retirement Allowance Choosing a Retirement Date Purchasing Service Credit and Plan Transfer
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Pre-Retirement Workshop: Overview • L.A. County Employees and Retirees • Financial Components of Retirement • Cost of Living Adjustment • Social Security Integration • Retirement Eligibility • Computing Your Retirement Allowance • Choosing a Retirement Date • Purchasing Service Credit and Plan Transfer • Retirement Benefit and Election Form • Retirement Process • Retiree Health Care Plans
Did you know?Source: May 2011 – All Retired Members & Survivors • How many retirees & survivors are over 100 years? • There are 50 retirees & survivors over age 100: • 45 female and 5 male • There are 2,135 retirees & survivors between age 90 & 100 • Top 3 states with most retirees: • California = 45,168 • Arizona = 1,365 • Nevada = 1,359 • What are the top 3 states with most retirees? • 181 members have their primary address outside of the U.S. • Top 2 = Philippines and Canada • What are the top 2 countries? • Oldest retirement date is 10/01/1958 • First survivor benefit goes back to 12/22/1950 and she continues to receive a monthly benefit. • What is the oldest retirement date?
Who is in what plan?Source: 6/30/10 Actuarial Report - Active General Members
How old are our retirees?Source: 6/30/10 Actuarial Report – All Retired Members & Survivors
SSA Personal Investments Deferred Compensation LACERA Pension Income Sources How Will Your Retirement Picture Look? How much income do I need? 70% of working income enough?
Health Insurance Subsidy • County subsidy based on Benchmark Plan - - Anthem Blue Cross Indemnity • County subsidy is subject to change
Cost-of-Living Adjustment (COLA) Plan A • Maximum 3% annual adjustment Plans B, C, and D • Maximum 2% annual adjustment Plan E COLA • Maximum 2% based on service earned after June 4, 2002 (COLA % prorated) • Plan E members may purchase Elective COLA CPI & COLA Accumulation
Social Securityif you are eligible… • 40 Credits/10 Years • WEP (Windfall Elimination Provision) • Implemented in 1986 • Possible reduction – verify with SSA • Some exemptions apply • GPO (Government Pension Offset) • Affects member as spouse, widow, widower • SS benefit reduced by 2/3 of LACERA benefit
Social SecurityImpact on LACERA Pension No impact on LACERA pension If you joined the County after 1982 • RELAX!
Social SecurityImpact on LACERA Pension Plan E Offset Affects those employed by County prior to 1983 and paid into Social Security as County employee Reduction based on actuarial assumptions built into plan formula Retirement Before Age 62: - Pre-defined Social Security benefit assumption used in calculation - No adjustment can be made to LACERA pension calculation
Social SecurityImpact on LACERA Pension • Plan E Offset Retirement at Age 62 or older: - Actual WEP-reduced Social Security benefit, or ineligibility, can be used to recalculate LACERA benefit (more $$$ for you) - Submit verification from SSA within 6 months of retirement datefor recalculation of LACERA benefit
Retirement Eligibility General Plans A, B, C, and D Vesting 5 years • Age 50 with 10 or more years of County* service credit • At any age with 30 years of County* service credit • Age 70 regardless of years of service credit *NOTE: Reciprocal retirement system service credit will help meet the minimum County service requirements.
Retirement Eligibility General Plans E Vesting 10 years • Age 55 with 10 or more years of County* service credit • Age 70 regardless of years of service credit *NOTE: Reciprocal retirement system service credit will help meet the minimum County service requirements.
General Members - Retirement Allowance Calculation • Age • Years and Months of Service Credit Age and Service Credit Determine Your Percentage Percentage x Final Compensation = $ Monthly Check Plans A, B, C, and D • 1 year highest compensation – monthly average • Plan E • Any 3 years of highest compensation – monthly average
Final Compensation - Pensionables Base Salary Cafeteria Plan Contribution (before 1996) Other Pensionable Pay Items (visit www.lacera.com) Buybacks (if available in your department): • 6 days sick buyback (non-Megaflex) • 20 days excess vacation buyback (non-Megaflex) • 10 days excess non-elective leave (Megaflex) Overtime Pay NOT Pensionable ! Termination Pay NOT Pensionable !
Computing Your Retirement Allowance Pre-retirement Guide Page 26 (A), Page 27 (B), Page 28 (C & D) for Members with No OASDI
Computing Your Retirement Allowance Pre-retirement guide Page 29 (E) for Members with No OASDI
Age at Retirement Plans A, B, C and D compute age in quarter-year increments up until the age of: • 62 – General Plan A • 65 – General Plans B, C, and D • Retirement benefit calculation increases each quarter of age (March 15, June 15, September 15, December 15) • What if February, Birthday on the 31st ………. Plan E computes age in full years: • Up until the age of 65 • Retirement benefit calculation increases each birthday
Purchase Service Credit Only Contributory Plan members are eligible to purchase prior government service credit County Credit Note: Certain limitations and higher costs for County Credit if you transfer from E to D • Temporary Time • Sick Without Pay (SWOP) • Redeposit of Withdrawn Contributions/Restoration/E to A • Counts for Insurance Service Credit Other Public Agency (OPA) Credit • Military/Federal • Other Public Agency (California only) • Counts for Insurance
Purchase Service Credit Additional Retirement Credit (ARC) ARC • Purchase from 1-5 years • Open to eligible members of all plans - Must have 5 years of actual County service • Not based on actual employment • ARC time eligible for COLA Does not count for Insurance Plan E Only (ARC): • Cannot be converted to Plan D later • Cost is higher when you have under 35 years of service • If you have close to 35 years of service, you may want to wait until you have 35 years
Payment Methods • Lump sum • Monthly payroll deductions • Combination lump sum/monthly payroll deductions • Before-tax payroll deductions (irrevocable but tax benefit) • After-tax payroll deductions (no tax benefit)–may stop payroll deduction or pay off in lump sum 120 days to complete contract after retirement Funds from any source (except ROTH IRA), pursuant to Pension Protection Act of 2006
Purchase and Your Retirement Allowance Pre-retirement Guide Page 26 (A), Page 27 (B), Page 28 (C & D) for Members with No OASDI
Purchase and Your Retirement Allowance Pre-retirement guide Page 29 (E) for Members with No OASDI
Plan Transfers Traditional/Open Window: Plan E to Plan D only Must convert all previous Plan E time to D Entry age Prospective: Plan E to Plan D Age at transfer - Incremental Buyback – optional conversion to D Plan D to Plan E For All Prospective Plan Transfers: Combined Benefit at Retirement Retirement Eligibility (Age 50 for D, Age 55 for E) 3-year commitment in new plan Plan E Plan D Plan E
Online Help Calculators on www.lacera.com • Retirement Calculator • Transfer Calculator • ARC Calculator Calculate your retirement allowance See how much it would cost to transfer to Plan D Determine the cost of purchasing Additional Retirement Credit (ARC)
Brochures & Forms on www.lacera.com To view, print, or order printed materials, visit theBrochures & Formspage. Look for these web tips within our printed materials to direct you to web pages online.
My LACERA on www.lacera.com Register to use the new feature,My LACERA, and access your personal retirement information online, 24/7. Look for the link on the home page. New Retirement Calculator with payment options now available New ARC Calculator available
The Process of Retiring Retirement Benefit Estimate and Election Form Guide ― Page 15
What Happens When I Retire? • County payroll will stop • Outgoing final check will be paid by your department • No gap in Health Insurance coverage • Board Letter • Termination date must be posted before LACERA can pay you • First payment will be a check • Keep LACERA updated on address changes • Maintain at least 2 valid photo ID’s
Spouse, Registered Domestic Partner • Dependent unmarried children • (Submit certifiedoriginal birth certificates) Choice of Health Insurance Plans • Who may enroll? • Until 19th birthday or 23rd if full-time student • Disabled adult children • 60 days from retirement date to enroll • Survivor coverage continuation • - “1-year” requirement for Spouse/Domestic partner • - “Payments” required *The County health insurance subsidy may be subject to change
How do I contact LACERA? • By phone - 800-786-6464 • In person - 300 N. Lake Avenue, Pasadena, CA • By email -welcome@lacera.com • Online - www.lacera.com
Pre-Retirement Workshop Good luck with Your Future Retirement! Thank you for completing the survey!